Price or quantity? The strategic choice of subsidized firms in a mixed duopoly

This paper investigates the endogenous choice of the strategic variable, price or quantity, taken in a mixed duopoly by a public and a private firm prior to market competition. While Matsumura and Ogawa (2012) in a standard mixed duopoly find that price is the unique equilibrium, we show that, by introducing firm subsidization in the same setting, quantity can constitute a dominant strategy equilibrium.

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Year of publication:	2013
Authors:	Scrimitore, Marcella
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 118.2013, 2, p. 337-341
Publisher:	Elsevier
Subject:	Price competition \| Quantity competition \| Mixed market \| Subsidy

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Type of publication:	Article
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L32 - Public Enterprises
Source:	RePEc - Research Papers in Economics

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